Archeologists unexpectedly discovered the world's oldest known tea leaves while working on a tomb belonging to an emperor of the Han Dynasty. The nearly 2,200-year-old tomb, discovered in the 1990's and located near the modern-day city of Xi'an in western China, included pottery figures and weapons, as well as a wealth of plants. Only after decades of analysis could the scientists finally confirm that some of them were actually tea leaves, giving a unique glimpse into ancient Chinese tea culture. The discovery of this fine tea, characterized by young unopened buds, suggests that tea was already being exported to Tibet along trade routes well before the Silk Road.
But green tea was not the only variety in the spotlight. A study from Australia and a review from the UK lent further credence to the notion that black tea is just as healthy as its green cousin. According to research, black tea was found to lower blood pressure, thereby reducing the risk of heart disease. It may also cut levels of bad LDL cholesterol and blood sugar. Again, given that heart disease is one of the major causes of death in industrialized countries, the regular cuppa is starting to look like an increasingly promising and unobtrusive solution to keep your health in check.
From a business point of view, tea manufacturers operate under two long-held beliefs: that the 30-50 year old female is the current primary customer and that conquering the young and hip generation of teens and twentysomethings is the only way to expand the category in the years to come. Both points are certainly valid, but they somewhat fail to reflect the economic and demographic realities of today. That is because the future, at least for the next couple of decades at least, actually belongs an entire population of baby-boomers that is currently entering retirement.
With vast amounts of wealth and legitimate concerns about ageing and health, this target should not be forgotten by tea businesses. Yes, that population may be not as gastronomically sophisticated or as creatively minded as others, yet no manufacturer or retailer can afford to neglect its impact on the bottom line, especially given that tea is so relevant to its health concerns. Indeed, most of the prominent health benefits of tea, such as reducing the incidence of cardiovascular diseases, cancer, Alzheimers and obesity, to name but a few, are obviously more relevant to a baby boomer than a college student. Add to that increased health and medical awareness, more free time to enjoy meals (and brew proper tea), as well as the spending power that the elderly possess and youve got an offer difficult to refuse.
Viewed in this light, these medical studies are more than just about tentative scientific findings, because they may point to a somewhat new direction for the entire tea industry. Despite limitations on health claims in marketing, they offer new ways of thinking about the relevance and potential of a population that goes unnoticed far too often.
Stepas Parulis is the editor of TeaTrends and oversees Adagio's operations in Europe. He analyzes the tea industry through the prism of market and consumer trends.
With reports of kombucha gaining a wider following among mass audience, it may be time to start wondering if the gourmet tea industry can learn a thing or two from the way its fermented cousin is making an impact on the market. While tea may be vastly more popular than kombucha, gourmet quality leaves remain somewhere in between mass and specialty sectors despite making enormous strides in the past few years. Initially, kombucha gained traction thanks to the vast array of health benefits that its followers swear by, which include detoxification, cancer prevention and energy increase. Leaving the veracity of these claims aside, this is not that different to the advent of gourmet tea, fuelled by a belief in its many potential health benefits. Later, the category expanded from local markets and delis into aisles and coolers of Whole Foods Market et al., again, similarly to the trajectory of premium tea (hot and iced). On both fronts, products became better tailored to suit mass taste buds with the inclusion of fruit juices or other sweeteners or flavorings to mitigate their unfamiliar taste.
That was then (although, lets admit that then was only a couple of years ago). The interesting part is how kombucha has since been branching out into various neighboring areas of food and drink, thereby increasing its market penetration. One smart idea is to push the beverage as a mixer in alcoholic beverages and an alternative to the usual suspects like Coke & co. What makes kumbucha relevant is not only the taste that it adds to the mix, but also the dimension of healthfulness that other mixers lack. In the back of our heads, we all know that alcohol tends to negatively impact health, so opting for an ingredient to possibly counterbalance some of those effects and detox your body is a winning proposition from a consumers point of view. Same can be said about tea, which is a source of various beneficial elements, yet it is rarely found in bars as a mixer. For example, how often do you get to opt for green or rooibos tea instead of soda water or Sprite for a mojito?
Another novel idea envisioned by kombucha manufacturers is to embrace their product for what it is: a fermented drink with a non-negligible alcohol content at the very least. Facing FDA regulations that prohibit the sale and marketing of beverages with more than 0.5% alcohol content as soft drinks, some kombucha manufacturers are owning up to the fact their product is for grown ups and register their businesses as breweries to be able to make the real brew. Such bold moves are refreshing to witness, especially on behalf of small producers that take on extra financial risk just to make their vision a reality. Here again, tea businesses could have something to learn from them and could, for instance, own up to the fact that tealeaves are not meant to taste of fruit and desserts. Real tea requires grown up taste buds. Yes, you can add flavorings to make the infusion more palatable to the average Jane or Joe. Yes, that would add sales to your bottom line in the short run. Yet if a tea retailers business is focused on full-leaf teas, wouldnt it make more sense to try to educate and train consumers palates instead of pandering to their every (uneducated) wish? Isnt the goal of such businesses the precise opposite: enabling people to learn to appreciate the fruity, floral and many other nuanced flavors and aromas that linger in a cup of pure premium tea? How sweet would that be?
Although the larger point is that kombuchas growing success should serve as an example of how niche players are pushing market boundaries and should empower the tea trade to take similar steps of faith in every direction. Of course, they shouldnt just replicate strategies adopted by kombucha makers, or any other beverage makers for that matter, but be bolder in pursuing their own route. Where that route leads remains a mystery, but learning what works for others and identifying the reasons behind it certainly eases the trip.
Stepas Parulis is the editor of TeaTrends and oversees Adagio's operations in Europe. He analyzes the tea industry through the prism of market and consumer trends.
The contrasting nature of these companies sheds some light on differences between the previous deals and this one. Both Honest Tea and Sweet Leaf Tea are specialized in ready-to-drink teas, which have very specific distribution channels and business models. Ready-to-drink beverage manufacturers usually hit a ceiling in their distribution, production and marketing capacity that prevents them from growing at their full potential. The need for solid partners with far-reaching distribution networks and deep pockets becomes self-evident in order to gain ground nationwide. Going down this route becomes almost inevitable. Tea Forté, on the other hand, is a "hot" tea company, specialized in premium loose and bagged teas that are supplied to luxury hotels, gourmet restaurants and specialized retailers. Due to its premium pricing and a more fragmented distribution network, it is a less convenient option for a company such as Sara Lee that is focused on mass-market brands. So what gives?
Despite a seemingly meager turnover of $12 million in 2011, which is dwarfed by Sara Lee's $9 billion global sales, Tea Forté is an established brand in the gourmet tea industry, which remains a relatively small playground in terms of sales. Its products also score high on packaging design and international distribution. The unique pyramid-shaped tea bags are sold in 35 countries, giving the Massachusetts-based company a worldwide exposure that few other US companies can match. But beyond these specific considerations, the larger implication of this deal is the potential that Sara Lee (and other giants of the food and drink industry) sees in the gourmet tea market. Gone are the days when full-leaf teas were sold in generic pouches with self-printed labels at local markets. They now sport the same aesthetic packaging as cognac or luxury chocolates. This transformation has brought teas to a wider audience and made them an integral part of a gourmet's shopping experience.
The fact that Teavana, the largest tea retailer in the country, has gone public last year and that words like Darjeeling, Genmaicha or Oolong are no longer taboo only confirm that the proliferation of gourmet tea is happening now. With many beverage sectors seeing declines due to the emergence of health and environmentally conscious consumers, Sara Lee is wisely tapping this trend. It hopes that its newest tea brand will be able to maximize this breakthrough in specialty and, potentially, in mass retail. Indeed, Tea Forté seems to have the capacity to make it all the way to most supermarket shelves thanks to a mix of a popular product, unique packaging and brand recognition. If history serves as an indicator, Sara Lee is relying on a blueprint used by luxury alcoholic beverage makers a few years ago. It's no secret that the success and the omnipresence of brands like Glenlivet, Hennessy or Moët Chandon (owned by international corporations such as LVMH and Pernod Ricard) can be traced back to the availability of their respective "accessible luxury" ranges in mass retail.
It is wishful thinking for anyone in the tea industry to believe that we will see a competition-grade Ali Shan oolong on a shelf in Wallmart in the near future, but so is the prospect of grabbing a bottle of Richard Hennessy cognac. A far more probable scenario is that quality tea will take a sizable bite out of the current offer of entry-level products, just as coffee beans displaced their inferior instant cousin. Sara Lee, which owns several brands of instant coffee and, more pertinently, bottom-of-the-barrel tea, hopes this acquisition will ensure that it doesnt find itself on the back foot going forward.
Stepas Parulis is the editor of TeaTrend and oversees Adagio's operations in Europe. He analyzes the tea industry through the prism of market and consumer trends.
Every two years the food industry gathers in Paris for the SIAL food expo, one of the biggest of its kind in Europe. This year was no different, with thousands of professionals attending the event, despite major strikes that had partially paralyzed France and its transport system.
Tea companies had a dedicated tea pavilion in the gourmet food hall, underscoring the growing importance of the sector within the fine food industry. Although traffic during the five-day event was not stellar, the quality of attendees was impressive nonetheless many of the top supermarket buyers (Auchan, Carrefour, Casino) and key distributors showed up to scour the stands for ideas and trends, as did thousands of independent retailers.
Scattered among several suppliers of bottom-of-the-barrel leaves were many exciting brands from France (Palais des Thés, Thés Georges Cannon, Kusmi Tea), the US (Adagio Teas, Boston Tea Company, Harvey & Sons) and from around the world showcasing inspiring produce. This matched the attitudes of many buyers on the floor (including large chain buyers usually conservative when it comes to premium tea), who were nothing short of amazed by the appearance of exotic varieties and aromas of surprising blends, and expressed confidence in introducing premium leaves to a larger audience at the expense of prevalent supermarket brands. Indeed, the local market seems to be following in the footsteps of the US, en route to a refined tea experience. It seems quite paradoxical that a continent so in love with gourmet food has deprived itself of such a wonderful beverage for so long!
Apart from improving quality and variety of teas available, the other major trend was a notable shift in how companies market the product. For decades, if not centuries, tea trade went hand in hand with a deep sense of tradition and heritage, relying on colonial and Asian themes to anchor tea in an ancient, aristocratic setting. Some European companies, Marriage Frères or Taylors of Harrogate to name just a couple, are still attached to this leitmotif today. For them tea remains something old rather than new; serious rather than fun.
It was therefore refreshing to see companies break away from this convention by adopting colorful, modern and ultimately lighthearted themes to cut through the clutter and make tea relevant for modern consumers. One such enterprise was Kusmi Tea, a company more than a century old that seeks to continually infuse its products with a touch of sophistication and modernity, without being weighed down by its considerable heritage. Its sister brand of organic tea Løv (leaf in Norwegian), launched at the expo, was even more disruptive, showcasing a minimalist, eco-friendly and no-fuss interpretation of tea. It seems even in France, attached to its traditional ways of life, slowly but surely, tea is beginning to get rid of its old complexion with its sights on the future ahead.
Adagio's products were also in the spotlight, particularly the Anteadote ready-to-drink iced tea range. Its pure and refreshing taste made a considerable impact on attendees' palates, since this product line remains the only one across Europe that is brewed with real tea leaves and does not contain any added sugar or sweeteners.
Finally, SIAL was a great occasion to meet many customers and colleagues that are dispersed throughout the world. It is often difficult to keep a close link with the tea community on different continents as daily life continues its course, despite the omnipresence of technological tools today. No surprise that this event, during which everyone sacrifices a certain amount of time to rub elbows with its peers and exchange past experiences and future plans, felt more like a friend gathering at times. Next rendez-vous in 2012!
Stepas Parulis is TeaTrend's editor and oversees Adagio's operations in Europe. He analyzes the tea industry through the prism of market and consumer trends.
A brief analysis of the US ready-to-drink iced tea market, which has been steadily growing thanks to innovative products and visionary leadership.
June is the official iced tea month in the US, with ice-cold jugs having long replaced steaming cuppas. It offers a fitting opportunity to reflect on latest developments in the industry behind this beverage discovered more than a century ago. Making its way from mothers garden table to sleek supermarket shelves, iced tea has transformed itself from a summer refreshment to a multi-billion dollar industry. Ready-to-drink (RTD) iced tea has also become a promising alternative to other soft drinks of today.
Despite its longevity, the ready-to-drink iced tea market is relatively small and new, buzzing with creative manufacturers and innovative concepts. This is an exciting prospect for the category, because it signifies that the secret (market) formula has not yet been discovered. There are hundreds of brands competing with very diverse product and business ideas, and nothing looks certain as it stands. Granted, there are marques like Lipton, Nestea, Arizona or Snapple that have found a sure footing, but they usually are only extensions of a soft drink conception that has been losing ground for quite a few years now. Indeed, the new face of RTD iced tea is smarter, fresher and greener. It is as much about business practices, sustainability and assessment of market trends, as it is about the drink itself. In many ways it reflects the transformations that have changed the appearance of the broader tea industry.
However, before moving forward, it is essential to establish a distinction between hot and iced tea in order to better grasp the nature of the game. Iced tea is quite different from its hot cousin, not least by its physical attributes. Tea comes in form of leaves that are light, easy to transport and command a higher premium. The leaves necessitate certain tools and time for preparation and enjoyment. In this respect, ready-to-drink iced teas are quite the opposite: they are heavy to transport and supply, have much lower margins (on a per unit or volume basis) and are consumed on the spot or on the go. All of this means that RTDs are much closer to the fast moving consumer goods industry than the gourmet market. This implies a denser distribution network, stiffer competition from all sides (including flavored waters, energy drinks, carbonated soft drinks, sports drinks, etc) and, last but not least, more investment upfront.
Whichever way you look at it, iced tea is more than tea on the rocks, even though growth in this category was as awe-inspiring as the take-off of gourmet tea. According to market research, the US ready-to-drink tea industry was valued at $7 bn in 2007 and is expected to reach $10 bn this year. And the fact that such growth was achieved during a severe global economic downturn should put things into perspective. Furthermore, even though the overall US beverage category declined over 3% in volume in 2009 (having dropped 2.1% the previous year first time on record) as customers continued to shun packaged beverages, the RTD tea market was the only segment to record a sizeable gain of 1.2%.
So the question on everybodys mind is how did such a relatively small industry achieve such stellar growth in these difficult times? One of the main reasons is a major social shift towards increasing health awareness. Modern zeitgeist dictates that it is possible to control and influence your wellbeing (both physical and psychological) by what you eat and drink. From this perspective, tea and its wide array of antioxidants and other beneficial compounds appears as an increasingly appealing fix for a crowd in search of nutritional balance in their lives. The fact that the beverage is brewed naturally, as opposed to artificially enriched with additives (as is usually the case for packaged beverages), adds further clout. And then there are literally thousands of scientific studies that have found their way into the mainstream media, confirming teas health benefits ranging from reducing risk of heart strokes to improving dental health. Unfortunately, continued reluctance on behalf of the FDA and its European counterpart to acknowledge those findings in some way or form remains a headache for this developing category.
There are other features in sync with the état desprit of modern shoppers that iced tea manufacturers have harnessed very successfully. This paradigm includes concepts like organic faming, sustainable business practices and environmental concerns. Iced teas available on the market today score high in those areas. In fact, these factors have become ideal drivers in positioning RTD iced teas as a credible alternative to traditional soft drinks. Most notable steps that the category has taken are to source organic tealeaves, replace sweeteners such as high fructose corn syrup with sugar cane or honey, improve livelihoods of farmers that supply the crops and strive to reduce its environmental impact. As figures show, shoppers appreciate those initiatives and reward such companies with a greater share of throat.
As can be expected, these efforts have not gone unnoticed amongst the big players in the beverage industry. Giants like Coca-Cola and Nestlé, as well as private equity firms, have been snapping up promising start-ups in the RTD iced tea category for some time. For example, Coca-Cola invested $43 m in 2008 to acquire a 40% stake in Honest Tea, whereas Nestlé recently agreed to provide $15 m of funding to Sweet Leaf Tea. Although the numbers look ridiculously small next to the revenue generated by these global conglomerates, they are still a clear indication that the tide is shifting in the beverage sector. The sooner you jump on the bandwagon, the smoother the ride. However, it has to be noted that these partnerships rely on more than just funding and the drinks giants are not just making a wild bet at a roulette table. They know perfectly well that success lies in their vast distribution network, established over decades of acquisitions and aggressive marketing techniques. As long as they remain the gatekeepers to this vital aspect of the supply chain, they have the home-court advantage with any new brand they are willing to take aboard.
Nonetheless, the most exciting aspect of the RTD iced tea sector is precisely the fact that there are so many underdogs competing for their share of limelight. Each brand has a unique interpretation of what constitutes the best iced tea and the jury is still out. This can be compared to the birth of the automobile over a century ago, when engineers were experimenting with diesel, petrol, steam, electrical and even hydrogen engines, all of which were coexisting before the winning formula emerged.
The easiest way to analyze this burgeoning category is to divide it into two subgroups: flavored and unflavored. The former encompasses teas mixed with fruit juices or flavored with other sweeteners, whereas the latter refers to pure naturally brewed iced teas. It is no wonder that flavored versions are more abundant, given the predominance of sweet-toothed customers, yet both subgroups address different consumer needs and have the potential to develop into huge markets.
Flavored iced teas are much closer to soft drinks than naturally brewed tea. In that sense they are more familiar to the taste buds of the average consumer and can be considered as beverages that bridge the gap between the traditional soft drinks and natural tea. In this respect they benefit from a lot of flexibility in terms of ingredients and formulas. For example, the leading brand in this subcategory, Honest Tea, boasts a range flavored with dozens of ingredients like berries, superfruits, exotic fruits and natural sweeteners. Similarly, Steaz iced teas are not only flavored with fruit juices and sugar cane, but are also brewed using sparkling water, making them not-too-distant cousins of carbonated soft drinks. Such features are helpful indeed if you are, say, a Dr. Pepper addict trying to adopt a more balanced lifestyle. And in the US there are millions of such sinners trying to redeem themselves from the excesses of high fructose corn syrup, hence the demand.
However, what about those who are actually into tea? Those who would like to experience the same complexity and richness of taste associated with gourmet tea, only in a bottle? That is where the other subgroup comes into play. Instead of accommodating mass market needs, these niche companies are providing connoisseur consumers with something that resembles a cup freshly brewed. Naturally, the priorities are quite different here. Quality of the tealeaves and complexity of the infusion are the main factors. Obtaining an accurate balance of aroma, taste notes and refreshment that reflects the properties of each tea variety is paramount. A fine example of this approach is the anTEAdote iced tea by Adagio Teas. The range contains five varieties (black, green, jasmine, oolong and white) of gourmet iced teas designed to highlight the features of each tea type. Tea aficionados can opt for the subtle and delicate flavor of white tea or choose a more complex and floral bouche of oolong tea.
There are opportunities for both subgroups to continue their expansion, as interest for healthy beverages and gourmet tea is still rather nascent across the western world. Nonetheless, the success of the multitude of players in the RTD iced tea arena cannot be attributed to market trends alone. A lot has to do with people behind the brands who infuse them with energy and visionary leadership. Most, if not all, of the companies started by brewing their first batches in basements and sheds across the country, which gives them a unique edge in understanding the amount of effort and experience needed to make things work. It is this empirical approach and the energy and innovation that stem from it that is the main asset against established marques. The spirit behind healthier beverages goes beyond product development and transpires into everything that these companies do: from the way they treat their customers and employees to new business practices that are changing the way companies are run.
It is difficult to predict which concepts will survive and which will have to suffer the consequences of natural selection. There are quite a few challenges that lie ahead for the category, not least the morose economic situation and continued pressure from traditional soft drink industry. In the meantime, those who are able and willing to adapt, react and innovate accordingly will have an edge.
Stepas Parulis is TeaTrend's editor and oversees Adagio's operations in Europe. He analyzes the tea industry through the prism of market and consumer trends.
A brief account of the Tea and Coffee World Cup that was held in Vienna, Austria, and why the participants are excited about the prospects of gourmet tea in Europe.
The Tea & Coffee World Cup Europe has always held a special place on the trade show calendar. It is the only large specialized tea exhibition in Europe and also the only one that attracts an international crowd of exhibitors and attendees. However, the principal reason why this trade show is worth visiting is the fact that it is aimed towards business-to-business trade. Contrary to most other expos during the year on both sides of the Atlantic, attended mainly by exhibiting tea manufacturers (or marketers, as they are known in some circles) and visiting gourmet food retailers and buyers, the stands at this event are populated by suppliers of goods and services for every stage of tea commercialization process. It is the insiders trade show, where the pavilion buzzes with tea growers from four corners of the globe, tea and herb wholesalers, packaging material, machinery and flavor suppliers, and many other related organizations and companies
Benefiting from Viennas central location between Eastern and Western Europe and a backdrop of astounding architecture, from classicist buildings to modern structures scattered over the former capital of the Austro-Hungarian Empire, this show left no boxes unchecked in terms of the variety of exhibitors and special events. To complement the wide array of companies present, Lockwood Publications, the organizer of the event, put together a comprehensive program of seminars, cuppings and even a symbolic tea auction in partnership with the Indian Tea Association.
After a sober event last year, mainly due to the credit crunch that had gripped the economy and affected the tea trade, this years attendees were humming with cautious optimism, which, keeping in mind the uncertain situation of some European economies (sovereign debt concerns in Greece, Spain, Ireland, Italy and Portugal spring to mind), did not seem that cautious at all. One source of enthusiasm was a gradual recovery of the European consumer, who is finally prepared to reopen his pockets and spend more on everyday luxuries like tea. This was particularly evident on many curious faces of store managers and buyers, tirelessly scavenging the stands for novel products and ideas with added value for their customers. Whether it was a new tea blend, an exotic herb or a novel packaging solution, it seemed like tea fever had gripped them all.
The unusual fact was that a large portion of those buyers did not come from Western European countries, typically known for higher disposable incomes and greater premium tea consumption, but from countries like Hungary, Czech Republic, Poland and Romania. Gone were the days when clients from ex-Soviet countries would arrive accompanied by bodyguards to buy tea directly at the show paying in cash, of course. The new buyer from Eastern Europe is entrepreneurial and open-minded, looking to source sophisticated products that would invigorate an aspiring class of shoppers, which was left out for too long behind the iron curtain without a good cuppa. This can be seen as a clear signal that the balance of gourmet tea consumption is shifting eastwards, opening up new growth-driven markets that have been slipping under the radar for quite some time now.
But the main cause for cheerful mood among the exhibitors had less to do with economy - it was really all about the resurging popularity of gourmet tea across Europe. The most somber predictions depicting customers scaling down on the quality of their tea amidst the economic uncertainty have turned out to be false, as specialty tea sales have blossomed. For example, the United Kingdom, one of the highest per capita consumers of tea in the world, experienced a 7% rise in sales in value of premium tea last year, compared with a mere 0.4% expansion of the overall tea market (which is already over-saturated with poor quality produce). It seems that offer diversification, product innovation and increased health awareness, three pillars of the gourmet tea trade that have been perfected during several years, are finally paying dividends. Granted, the Europeans are about a decade behind their American counterparts when it comes to embracing a beverage that is so multifaceted, great tasting and cheap (on a per cup basis), yet only few could have predicted that this would happen during one of the worst economic recessions in recent history.
So how does this good news affect the various players in the tea arena? Naturally, tea growers and suppliers are finding more clients for their crops. They are also sourcing better teas and insisting on higher quality standards that the modern shopper has grown accustomed to. But it doesnt stop there. Tea packing machine manufacturers and pyramid tea bag makers (a large triangular bag is necessary to allow the large leaves that characterize whole-leaf tea to expand correctly) are more than happy to see clients ordering better equipment and accessories to cater to drinkers who like to enjoy gourmet tea, while not compromising on the convenience of a tea bag. Same goes for flavor and herb suppliers, whose services are widely used by manufacturers to recruit new drinkers by means of enticing or exotic blends that unflavored tea leaves do not possess. Finally, there is an array of auxiliary companies orbiting the tea microcosm, from manufacturers of niche varieties such as Matcha or Rooibos, to organic and ethical standards organizations, to various tea boards and associations all looking to add their touch to the diversity of the universe of tea.
And it is clearly the end-consumer who is benefiting from this situation the most. Every company in the tea trade is bending over backwards to satisfy his every desire with an eye on keeping the nascent specialty tea trend alive and kicking, which will inevitably lead to more innovation, choice and ultimately better prices. Considering the Greek debt crisis taking place simultaneously, and its effects on the Euro and other Euro-bloc nations in similar situation, the sight of all of the participants pulling off such a difficult act in good mood and with a positive spirit on the exhibition floor in Vienna was truly inspiring.
Stepas Parulis is TeaTrend's editor and oversees Adagio's operations in Europe. He analyzes the tea industry through the prism of market and consumer trends.
Cynthia Fazekas, Adagio's US Sales Manager, shares her thoughts on retail and consumer trends for the holiday season and gives some tips to stay ahead of the game in the tea business.
The current year is drawing to a close with the crucial Christmas season upon us. What are some of the trends you have witnessed this year what impact will these may have for the trade in the future?
Emphasis seems to be on quality but affordable teas, and practically reigns supreme in tea wares. Tea shoppers are buying by price point and are seeking less exotics, more tried and true favorites preferable in smartly priced gift sets. They seem to want good looking items, not too expensive and certainly not frivolous.
Gourmet items that the gift receiver might not otherwise splurge on for themselves are trending. Plus the "good health" aspect of tea shows care and concern.
With the US being in the midst of a severe economic crisis this year, how has the broader economic environment affected the tea industry and, more specifically, the retailers that you deal with on a daily basis?
In the current economic environment, we are seeing that retailers are carrying less stock initially, preferring to order more frequently than to risk sitting on product should the season fall flat. We will likely see more "emergency" and last minute orders.
Also, we've seen promos starting earlier than in previous years, as retailers expect consumers to more carefully ration their holiday budgets and want to capture the potential sale as early as possible.
As shoppers opt for more affordable and pragmatic choices, what are some of the traditional products that tend to do well now and might there be any exotic items that may have been overlooked? And given the current context of "smart" shopping, what are some of practical tips you would give to retailers in terms of tea selection and presentation?
Comfort teas such as English and Irish Breakfast blends and dessert-like flavored teas do well, especially paired with modestly price tea gadgets or brew ware.
Smaller amounts of exotic teas could have more impact, especially novelties like hand tied blooming teas that can be sold "by-the-bloom." A small pack of a single estate high elevation variety is also an option, as something unique and intriguing is sure to attract connoisseur customer attention.
As you note, retailers are more carefully apportioning their stock levels. What are some of the pitfalls to avoid in this approach and how should one ideally manage the process?
Pitfalls to avoid are underestimating customer turnout and product needs. This could result in lost opportunities, as once the customer leaves because you did not have a product they wanted, the odds of them returning when the item is back in stock decrease dramatically.
More frequent orders of small shipment could lead to additional shipping/handling charges that eat a bit more of the bottom line. Overstock issues can easily be handled by January sales events. Plus tea still mostly is a cool weather beverage and sells well all winter!
Economic worries will continue impacting sales for some time and businesses are still adjusting to the current situation as we head into 2010. Which business models and practices may find it the most difficult to survive in this environment and which ones have the ability to counter the trend?
Those that emphasize value and service will likely survive and perhaps even excel. Businesses that have not learned to trim their excess or have taken on too much debt will likely fall victim to the economic trend.
The online platform has a bright future in my opinion. People feel increasingly comfortable shopping online and appreciate the convenience associated with ordering from home or office. Smart and relevant use of vast possibilities that the web offers remains a challenge for many businesses.
Looking at the broader tea industry in the years ahead, what will be the (new) market drivers that will lift the sector and expand its reach once the economic situation improves?
My belief is that market drivers will be those that place the emphasis on the customer, their needs and individuality, while still exposing a jaded consumer to the new, exciting and exotic - all while remaining practical!
In terms of categories, it will be intriguing to see the RTD sector develop, as many multinational companies have taken a keen interest in it and are providing funding and distribution opportunities. It remains to be seen how convenience will shape product quality and taste.
Cynthia has an extensive experience in the US gourmet tea industry, consulting businesses large and small on all issues relating to tea for many years. She is currently managing Adagio's US sales. Her day always starts with a cup of Golden Yunnan tea.
A conversation about the Chinese tea market, the differences in consuming tea between China and the West, and the actions that the government is taking to boost the industry with Lydia Liu, renown tea buyer from China.
China has historically been a large producer and consumer of tea. How would you describe the state of the tea industry at the moment and has it yet felt the effects of the global economic slowdown?
China is indeed a large tea producer and consumer of tea. Chinese teas are famous in China and overseas. There are many Chinese people like to spend money on high quality traditional Chinese teas such as Ti Kuan Yin, Mao Feng, Long Jing, Jasmime tea and Pu Erh tea. Higher grade and early spring teas can be sold at a very expensive level which is double or treble that of a foreign price. Most Chinese people enjoy the pleasant taste of teas with beautiful tea sets. People also like to use nicely packaged teas as presents during festivals. So tea is very important for Chinese daily life. As a result, the production is large to meet the huge demand of tea drinkers that has been around for so many years.
At the moment due to the economic slowdown, Chinese market is quiet. There are less people that go out to eat and consume. So the tea market is difficult to maintian. Many people have scaled back on the quality of tea they drink. Some have abandoned tea entirely and drink water instead. On the other hand, lots of people in China have lost jobs and new graduates cannot find work as well, which makes the situation worse. So generally speaking, Chinese tea has been effected by the present economic slowdown.
The Chinese market is hard to penetrate for foreign tea companies. What differences exist in local preferences of tea compared to the Western world and what are some of the major trends in the market right now?
1.Chinese people prefer traditional Chinese teas such as Ti Kuan Yin, early spring Long Jing and green tea, jasmine tea etc. All these teas are natural teas without any added flavor. Some good Ti Kuan Yin can be brewed for more than ten rounds. These teas are popular everywhere in China. Western people also like certain high quality traditional Chinese teas such as Ti Kuan Yin and Long Lung, but they pay more attention to the appearance while Chinese like the endosarc.
2.Chinese people do not like white tea. As they think it is too light. Western people like white tea with beautiful appearance such as Flowery Pekoe and Pai Mu Tan.
3. Chinese people do not like flavored teas, while the western people like different kinds of flavor teas with various essences and flower notes.
4.Chinese people seldom drink tea from teabags, as local tea lovers use tea sets to enjoy tea, whereas people in the West prefer the convenience of teabags.
5.Chinese people sedlom drink black teas while the Westerners love different kinds of black tea with milk.
Due to the aforementioned differences in tea taste, I think this is why foreign teas have found it difficult to come to China. At the moment only Lipton brand is widely present Chinese supermarkets, as they have spent a lot of money on advertisement and shelf space in supermarkets.
The trend driving the tea market now is the Chinese young people, who are ready to accept foreign teas such as flowery teas, black teas and bottled teas. Maybe after some time these teas will become popular in China, given that the economic situation improves as well. But I still believe that most of Chinese people will keep on drinking traditional Chinese teas such as Ti Kuan Yin and Long Jing. Unlike Western people, Chinese are rather conservative and traditional.
Consumers seem to be tightening their belts in China as well. How has this affected tea producers across the country and how do they cope with a falling demand of their produce? Will the negative influence be felt more in domestic demand or on exports?
This situation has affected the tea producers. In early April this year I went to visit some tea gardens and factories. During my trip, we heard lots of stories about factories being closed or in bankruptcy. In Zhejiang, I also saw a famous factory which was empty, with many morden machines not operating any more. April is normally the busiest month to produce teas. I was so surprised to see the effects of the recession in tea factory. I don't think many factories have plans to face the falling demand for tea. Some are just waiting to see if things can be changed or if the government can give some assistance. Some have to switch the tea factory to other uses or rent the sapce out for others. Some cannot afford the cost and have to close.
Exports will be more hurt than the domestic market. Of course there are many reasons. First, Chinese import and export regulations ase always very strict and complicated. Only the import and export companies can import and export goods. An local foreign company office cannot import or export - they must trade through another company. Also, the procedure of importing and exporting is very complicated. Secondly, exported teas require to be inspected by local authorities in the tea factory. The factory must be in line with the strict rules. New guidelines were introduced last year for producing factories, so many had to shut their doors because they couldn't comply with them. This means that not every tea factory can apply for inspection for export. Finally, in the past two years, the US dollar exchange rate has been low compared to other foreign currencies, which made the cost in Chinese Yuan high and foreign payment low.
You mention Lipton as the only major Western player to have penetrated the Chinese market. What are the some of the local brands that are encountering success in the marketplace and what distinguishes them from the rest?
Lipton has penetrated the Chinese market successfully after many years of hard promotion and advertising activity. In China the most famours brand is Tian Fu. They have opened multiple tea shops across the country and sell teas only through the shops. In fact, Chinese tea names are more popular than brand names. For example, if a person wants to buy a Ti Kuan Yin, he won't care about the brand, but he will try to taste the teas before he buys. This is the most popular way selling tea in China
The government plays a central role in defining business policies of many Chinese industries. Is it aware of the current malaise in the tea industry and what plans does it have to support tea producers and businesses during this difficult period?
The government has been aware, these past two years, of big drop in exports and of the recent recession. They are trying to implement many policies recently, with the aim of encouraging consumption inside China. If the percentage of consumption becomes greater than the savings rate, the economy will recover. So many policies such as reducing the interest rate and stabilizing the stock market are based on this, because China doesn't rely on exports to bolster its economy. From this point of view, it is also something that can impact the tea industry, even though there is no tea-specific policy, as many industries are facing the same problems as tea growers. So at the moment it is not simple to ease the difficult situation of tea producers. It will take time to recover.
As a tea buyer, you have the unique advantage of being in touch with many producers and brokers across the country. How would you describe the current sentiment in the marketplace and what do insiders expect for the year ahead?
I had many chances to talk to tea producers and brokers. The business is now not doing well, which is quite upsetting to them. The tea markets are very quiet. Many people lost jobs or receive no salary due to a reduction in business and income. Most of them are waiting. I hope next year will be better. The future is difficult to predict, but the government is doing the best it can to stimulate the economy. So I think maybe in middle of this year things will be recovered and start improving. We should not be too gloomy.
Lydia is a tea lover from China and has dealt with Chinese tea exports for 15 years. She has a thorough knowledge for various kinds of Chinese teas and her favourite tea is Chinese Lung Jing.
A conversation about Specialty Tea market in the UK, its similarities to the wine industry and the modern conception of tea business with Jane Pettigrew, writer and consultant based in London, UK.
Specialty tea has done extremely well over the last decade, evolving from niche to mass market status. How would you describe the state of the industry in the UK at the moment and what were some of the key drivers in its rise to popularity over the past few years?
Tea in the UK is still very much an everyday brew that many people take for granted and really don't know very much about. They don't realise, for example that most tea bags are filled with a blend of teas from Vietnam, Indonesia, Rwanda, Malawi and other small African countries as well as the better known India and Kenya. In fact, most people have probably never stopped to think about where their tea comes from or how it is blended with such practised skill.
However, if you liken our tea trade to the wine trade in Britain about 30 years ago, it becomes clear that with the right sort of marketing, the right marketing language that makes some sense to the consumer, the placing of tea (or indeed any product) into a more classy and stylish (possibly more expensive) category, and with a more adventurous range of products available in normal high street shops where everybody shops, British consumers will begin to show an interest. The wines on offer in the UK in the 1960s and 70s were limited and of pretty poor quality, but today, everyone knows their grapes, their origins and their preferences. The same thing is now happening with speciality tea - more people now know that there are greens and whites as well as blacks - they may even be aware of oolongs and puerhs. More teashops are to be found in mainstream shopping centres and high streets, more varieties of traditional and more unusual teas are on show on the shelves, marketing material, menus and packaging carry much more inspirational descriptions and tasting notes, staff in hotel lounges, tea rooms and tea retails stores are better trained, brewing methods and presentation have improved and prices per pot or per kilo have gone up - thus placing the product into a connoisseur category and making tea more than just a brown coloured liquid. It is no longer considered 'naff' to drink tea after dinner, it is chic and stylish and such a good choice! Even the Financial Times now includes long articles in praise of speciality teas from China, Taiwan, India and other far off exotic places.
Other reasons for the new upward trend are all the health messages that appear in daily newspapers and glossy magazines almost every day of the year. Tea is now seen as a healthful beverage, an excellent alternative to coffee, carbonated drinks and alcohol. Many people now recognise that it's fun, young, cool to meet friends in a tearoom; it's fashionable to take afternoon tea; it's a relatively low-priced treat to buy good quality loose leaf tea to brew at home; and beautifully packaged tea makes a great gift. And after all we now grow our own, very expensive, very exclusive tea in Cornwall. That has really made people sit up and take notice.
The Specialty Tea category in Great Britain is relatively new. What are the reasons behind this delay in a country historically associated with tea culture?
I think firstly, that the British have never been particularly adventurous about or even interested in their food and drink. We have a very pragmatic approach I think and have no historical culture as in France or Italy where food and drink is seen much more as one of the essential pleasures of life on which a great deal of time and thought is spent.
Added to that is the fact that, since the introduction of the teabag, most people's understanding of what tea is and where it comes from has been lost. So, if you talk to people now in their 60s, 70s and 80s, they tend to have a much better knowledge about different types of tea and will choose a tea by its origin rather than just accepting tea (although that does depend on background and 'class' etc). They probably know that teas are different and why, and may well have visited tea gardens or some may even have grown up on a tea plantation. People of a younger generation, on the other hand, will be used to simply drinking 'tea' usually made with a tea bag, but will not have a clue about where the tea inside has been grown or that the tea inside the tea bag is a blend.
Because tea is so much a part of our culture, people tend not to stop and ask where it comes from, what it is etc. It's a little like any other everyday commodity - it's something you need, something you take for granted and so, when you pick up a packet from the supermarket shelf, you may choose a particular brand or be aware of the price but that's about all most people think about while shopping. Even buyers in the big supermarkets don't have a clue what they are putting out onto the shelves - to them it's just 'tea' - imagine them doing the same with wine today!
Quality tea usually comes at a price. With the UK experiencing one of the most severe recessions in modern history, how will this newfound appeal for luxury produce likely be affected?
I don't think we can know this yet. If enough people have already started choosing speciality teas from speciality suppliers and are hooked on the quality and the taste, then they will perhaps stay with their choice. Others will inevitably cut back and perhaps return to cheaper types of tea that they can pick up for less in the supermarket.
You are a leading authority on tea and consult many businesses in the UK and abroad on various aspects of this unique beverage. Have you already noticed a shift in the way clients feel about the tea business given current market conditions and what are some of the concerns that are being raised?
No. I think obviously people are aware of what is happening and will be concerned as to how it will affect them but so far, most tea businesses seem to be doing well. Apart, that is, from Whittard who has recently announced to be going into receivership. I'm not sure that that is anything to do with the recession though.
Where is the tea industry likely to be heading in the foreseeable future, and what consumer / product trends may we expect to move the category forward in these troubled times?
So far, despite the economic downturn, established tea rooms and tea bars do not seem to be suffering. The general feeling seems to be that quality tea is a relatively low-priced treat and, as people need treats during a recession, those peaceful, recuperative, calming moments with friends or alone over a pot of tea will continue to be part of people's lives. The individual success or otherwise of any business will obviously depend on how well it matches expectations of customers. But as with wine, once a tea drinker has refined his or her palate to the appreciation of top quality, fine world teas, they will not easily turn back to cheap tea bags that perhaps they drank previously.
I think we will see more and more of the bright, young style of the more modern tea shops where friendliness, service, great offerings, and a really special atmosphere brings customers back and back. In some cases that will be funky, buzzy, connected to the lively atmosphere of city life; in others it will be a more traditional, calmer, quieter but still stylish and contemporary. I think we will see more innovative brewing methods and more thoughtful presentation, lots of glass and more quirky designs, less of the old fashioned Victoriana. People want to feel they are moving forward not back. More people now recognise that tea does have valuable connections to our past but also to our future and they do not care for the stuffy, over-flowery, backward-looking approach to tea. Now they want a freshness, a lightness of touch and a creative spirit. I also think tea drinkers will continue to show an interest in more unusual origins - perhaps Korea, Taiwan, hand made teas from Africa, etc. They will be captivated and hooked by the stories that connect them to the people who make the teas they like to drink.
After 12 years as a language and communications trainer, Jane opened the well-known tea-shop, Tea-Time, in Clapham, south west London with two friends. As the shop became a thriving success, Jane also started writing and lecturing about tea and eventually sold the shop to become a freelance editor, writer and consultant to a number of tea companies and organisations including Tea International, journal to the Tea Trade, the UK Tea Council, The UK Tea Club, Tea and Coffee Trade Journal, Tea and Coffee Asia, and the Indian Tea Board. She has also trained staff and given presentations in a number of five start hotels and top tea rooms around the world and now gives tea masterclasses in London under the auspices of The UK Tea Council.
She has written 13 books on tea, 18 other books on food and food history, and articles and essays on various tea-related subjects have appeared in newspapers and magazines both in the UK and overseas. She appears regularly on television and radio to discuss the various aspects of tea and tea history.
A conversation about the state of the Specialty Tea industry, impact of current economic downturn and broader picture for US businesses with Joseph P. Simrany, President of the US Tea Association.
Specialty tea has done extremely well over the last decade, evolving from niche to mass market status. How would you describe the state of the industry at the moment and what were some of the key drivers in its rise to popularity over the past few years?
Tea has been a relatively late bloomer in the United States. For the first 200 years or so it has maintained a sedentary existence and remained in the shadow of other more popular beverages such as coffee, soft drinks, and water.
In the face of this stagnation the industry, through its trade associations; the Tea Association of the USA and the Tea Council of the USA, was challenged to do something to jolt the beverage out of its morass. What ensued was a strategy and series of programs designed to associate tea consumption with a great many health benefits. These programs remain in force today and are in lock step with an ever expanding consumer desire to eat healthier. Over the last 20 years the Tea Council of the USA has spent millions of dollars to reinforce the message that tea is perhaps the healthiest beverage that consumers could drink and what started as a USA initiative has become the rallying call for the entire global tea industry.
While the health message was critical to taking the industry off life-support it certainly is not the only reason why tea has been transformed from mediocrity to vibrancy. The health message has served to make consumers and entrepreneurs more aware of tea and has allowed the industry to flourish by introducing new and exciting product formats such as RTD teas and Specialty Teas. These new forms are also in line with consumer needs and desires and should allow the industry to maintain its momentum despite the troubling economic times we find ourselves in.
Scientists have played a crucial role in identifying various health benefits of tea in fighting cardiovascular diseases, Alzheimer's and diabetes. Despite hundreds of studies on the beverage's health benefits, why is conclusive evidence still hard to come by in the scientific community and what positive steps could the Association take in light of increasing evidence on that subject?
There is no shortage of "conclusive evidence" amongst the thousands of scientific studies that have investigated the health benefits of tea. What are missing are clinical studies (studies conducted with real people as opposed to laboratory tests). Since these studies can cost many hundreds of thousands of dollars to conduct, in some cases millions of dollars and several years to complete, there is little that the Association could do with its current budget. During the interim, the Tea Association and Tea Council of the USA is maximizing the coverage of what we have to work with and routinely identifies between 600 million and one billion positive consumer impressions directly resulting from our PR efforts. We are convinced that it is only a matter of time before we will have the clinical studies required to petition for an official health claim.
The Specialty Tea industry was founded on consumers' desire for healthy, natural and high quality products. How might the current economic climate affect the playing field in the market and what measures are at the Association's disposal to bolster the sector during these tough times?
These are troubling times that we find ourselves in and the bad economy is likely to negatively affect every business segment in every country in the world. There is hardly anything that the Association might have in its arsenal to offset the damage done by the very institutions that we look to for stabilization.
Despite these troubling times, tea is inherently better positioned than most industries in that consumers always have a need for food, health, and tranquility all of which tea is uniquely qualified to deliver. It will call for some creativity on the part of specialty tea purveyors and perhaps a flexible approach to pricing to help reduce concerns of affordability.
Government regulators in the US and abroad have so far been quite stoic towards the plethora of scientific studies highlighting tea's potential. Is such a stance justified given the abundance of scientific evidence and how could a more favorable FDA position help the tea industry?
US regulators are reluctant players when it comes to the dissemination of food health claims beyond the traditional Food Pyramid Guidelines. They are very concerned that too many specific health guidelines will only serve to confuse consumers and distract them from the primary message. As a result of that inherent mind set, they have put together very specific requirements that must be met before they will even consider additional, product specific health claims. They apply these requirements consistently and very infrequently grant new health claims to specific classes of food.
Of course the Tea Industry would benefit greatly from a clearly worded, consumer friendly, health claim but in its absence there is still much that the Tea Council and the industry could do to reinforce the consumer perception that tea is indeed a healthy beverage.
Experts often cite America's capacity to innovate as a key to overcome crises and ensure economic prosperity. Which sector of the industry looks most dynamic in the current environment and where do you see the growth coming from in the foreseeable future?
Somewhere along the way to greatness the USA has lost its way to a point where there is precious little (except freedom and opportunity), that we excel at. The obvious area that we need to regain leadership in is in the area of innovation. Here we have the opportunity to set the pace for the rest of the world and lead the rest of the world from where we are today to where we could be in the future.
While innovation could play an important role in almost all industries, it is particularly important in the fields of energy, food, transportation, communications, medicine, micro & nano technology and the environment. These are all industries that are critical to our very existence and to the sustainability of the human race. The USA needs to beef up its educational facilities to ensure that we steer more of our young people into these important fields. Also we need to take such other actions to ensure that we remain a haven for the world's brightest minds to encourage them to learn here and work here towards breakthrough discoveries in each of these fields. Then and only then will we be in a position to regain our former prominence and respect.
While we are on the road to recapturing our former greatness we need to also provide political leadership from a standpoint of our actions both at home and abroad. We need to breathe new life into the United Nations and to help transform it from an impotent artifact to a vibrant humanitarian and peacekeeping force that operates on consensus flowing from old fashioned diplomacy. We have the resources to make this happen and all we need now is the resolve. Let us all hope for a good start in 2009.
One of the most important factors defining the current popularity of tea, particularly in the West, is undoubtedly the teabag. In retrospect, the (albeit accidental) invention of pouches that can be dunked directly into hot water has strongly impacted the spread of the beverage in the industrialized world. It made tea consumption possible in an urban setting and created a format fit for existing retail environments. It must be said that convenience came at the expense of quality, with mediocre tea grades becoming standard for most of the twentieth century.
The teabag was later improved upon by adding an individual wrapper, making it even more portable and versatile, whilst at the same time preserving contents' freshness. Curiously enough, these covers have become a collectible item for a small, yet vibrant group of tea aficionados. Especially in countries like the Netherlands and the Czech Republic, collecting tea bag covers has become a popular pastime, with sporadic fairs organized amongst these scattered communities. The fact that they are sometimes swapped online between unfamiliar collectors certainly adds to the flair.
While collecting tea bag wrappers or any other forms of packaging might not qualify as a trend itself - a trend being a more profound and noticeable socioeconomic shift in attitude and behavior - it has the merit of diligently reflecting the evolution of trends in the way tea is represented in the western society. In other words, it encapsulates the filiation of different themes and designs associated with the beverage.
For example, one recurrent theme is aristocracy - tea historically being considered a luxury beverage in the West- with references to (fictional) aristocratic and royal figures being a common leitmotif. Even industrially manufactured, tea still has the power to take us back to the eighteenth century England, where dukes and duchesses enjoyed the exquisite refreshment in fabulous palaces. Who wouldn't want a piece of blue-blooded luxury?
Another theme widely used through the years is nature, thanks to various motives of plants, animals or exotic landscapes, all telling in some way or form the story of tea's exotic provenance from places untouched by man. Tea is a natural drink after all and every possible image (tea leaf, mountains, elephants, berries, etc) has been used to reinforce tea's intimate link with nature.
So teabag covers, like other mediums of expression, can give a good idea of how tea was perceived and marketed through the years and should not be considered as mere historic artifacts. They are rich sources of "persuasive techniques" used in the past and are a fun way to look back at the evolution of this unique beverage in our society. The fact that such covers come from all over the world and are mainly suited for local audiences adds even more variety to an already diverse drink and certainly increases the "collectability" factor. It is also a great way for teabag "archaeologists" to compare the differences in the way tea is represented and drunk worldwide. And that's another way to enjoy tea!
The World Tea Expo is known as the definitive annual rendezvous for the entire tea industry. It gives the attendees a complete overview of the market and let's them keep a finger on the pulse of this evolving industry. This year was no different, as the show, held from May 27th to June 1st in Las Vegas, NV attracted a large crowd of industry professionals (everyone from tea room owners and distributors, to high-profile keynote speakers and young entrepreneurs) to talk everything tea at the Mandalay Bay convention center.
It's no secret that the expo is an ideal place to hunt for latest market trends that will shape the industry in the upcoming years. Behind the glitz, a more insightful eye can spot certain reoccurring themes that give an indication as to the future of a beverage so recently discovered by the masses.
An aspect of tea that benefited from a lot of attention this year was definitely its visual appeal. Similarly to wine, tea is usually judged by the bouche and the nez, yet the current emphasis on the robe proves that tea can be something to be admired by the eyes as well.
The visual splendour is highlighted either by beautifully expanded leaves or radiant colors of infused water - both of which vary dramatically from variety to variety. This makes the visual dimension relevant for tea vendors and tearoom managers alike. Whether to drink or display tea, clear top containers (introduced by Adagio Teas several years ago) and transparent tea ware were a clear hit with both exhibitors and attendees, and are bound to make an impact on the way tea is displayed and packaged in the future.
The expo also offered the opportunity to showcase the unconventional side of tea: as an ingredient in various drinks and foods. For example, Suntory's Zen green tea liqueur stood out as a novel interpretation of a cocktail drink with a sweet green tea flavor, and which, by the way, was one of only a few tea drinks to be enjoyed responsibly at the show.
Likewise, tea continues to be successfully used in small treats like biscuits, chocolates and mints - with, for example, Biscotea, Choclatea and Sencha mints playing with different notes of every possible variety. It feels exciting to witness that tea is appreciated just as much for its taste, as for its numerous health benefits. It can be enjoyed, as well as used. The beverage seems to be regarded not only as an antioxidant quick fix, but also as a flavoursome drink fit for every palate.
Finally, it was hard to ignore the increasing sophistication associated with the tea making process, as a plethora of devices (everything from variable temperature kettles to complete water-purifying systems) attests to the level of skill and detail expected from a superior cuppa. Indeed, premium teas necessitate additional attention to be paid to water composition and temperature, as well as the steeping times - and that's becoming reflected in the quality of instruments used for their preparation.
This is good news for gourmet tea businesses, which again have a chance to capitalize on their premium products and extensive know-how in order to accommodate the needs of a growing number of initiated tea lovers.
The overall verdict of the show? With the market booming with fresh ideas and innovative people, an optimistic feeling accompanied by healthy and flavorsome tea, in whatever shape or form it may be.
Green tea has come a long way from its humble beginnings in ancient China. Not only has it become the prevalent variety in many Asian countries, where it is now considered part of the cultural heritage; it has also recently enjoyed a growing number of followers in unexpected places like the US and Europe, historically more accustomed to black tea. The reasons behind its rise to fame in the West are evident: numerous health benefits and a pure, yet sophisticated taste. Nowadays, it even comes conveniently packaged and is enjoyed as a refreshment. The antioxidant-rich beverage is in a way a symbol for the renaissance of Epicureanism and crystallizes the modern consumers - level of implication in everyday health and wellbeing.
The health credentials of green tea are quite impressive: studies suggest potential uses in fighting different types of cancer, diabetes and heart diseases. It is effective against allergies, arthritis and even bad breath. Recently, a Japanese study found that green tea catechins may inhibit the loss of reference and working memory linked to plaque formation in the brain, which could help combat Alzheimer's disease, the most common form of dementia, affecting over 13 million people worldwide. It seems it's as close to an elixir of youth as it can get for aging baby-boomers and jaded urbanites.
The enthusiasm surrounding the green beverage can be felt in the boardrooms as well. With summer fast approaching, the ready-to-drink products are once again in the spotlight, with Nestle and the Japanese drink manufacturer Suntory teaming up to begin sales of upscale green tea drinks in an attempt to challenge the dominance of Ito En in the unsweetened green tea market.
For those with a sweet tooth, Coca-Cola has announced a facelift for the Nestea product line by means of improved packaging and new flavors in order to distinguish the range from its carbonated peers and improve its market position. Nestea is ranked fourth in the US, with eight and a half percent of the market, behind leaders Lipton, Arizona Tea and Snapple - which indicates only one thing: Americans like their tea sweet and the beverage still has a long way to go before it is enjoyed in its natural form.
The current situation suggests a clear split between two very different conceptions of ready-to-drink tea that coexist on the market today: the purist one, that focuses on traditional features like leaf quality, subtle flavor and brewing know-how, and the pragmatic one, which is about conciliating the health benefits of green tea (usually from concentrate) with the appeal of sweet flavors that many people are used to (usually from fructose or corn syrup).
The purist conception is certainly at risk of falling out of favor with people turned off by the "dull" taste and the relatively high purchase price. On the other hand, the pragmatic proposition carries a much greater danger of inducing the belief that antioxidants can somehow compensate for the typically mediocre nutritional profile of the drinks (similar to having a diet Coke with a super-sized McDonald's meal). For example, Canada Dry's Green Tea ginger ale contains beneficial green tea antioxidants, yet a 20oz. (600ml) drink represents 60 grams of sugar. The irony of it is that antioxidants are supposed to fight some of the very consequences of sugar-laden diets such as diabetes and cardiovascular diseases.
Health considerations aside, this dual identity touches upon an important question for everyone that enjoys the drink: what is the essence of green tea? Is it a mix of certain functional attributes that can be diluted and altered according to market trends or is it a "sovereign" beverage representing specific standards in provenance, quality and taste, and reflecting a lifestyle centered on physical and mental wellbeing?
The answer remains unclear and the customer's nutritional karma will certainly have the final word. In the meantime, fast food will continue to taste better with sparkling soft drinks.
The year started on a busy note for the natural drinks' sector. Two deals, on both sides of the Atlantic, have confirmed the positive outlook for the industry. In February, Coca Cola acquired a 40% stake in Honest Tea, an organic and Fair Trade certified ready-to-drink tea company, for a fee of $43 million. Across the pond, McDonald's recently confirmed plans to ditch its current provider of teas - Tetley of India's Tata Teas - in its 1200 outlets across the UK for the more sustainable produce of PG Tips, owned by Unilever and certified by the Rainforest Alliance.
While the nature and the scope of those deals are quite different, they clearly indicate where the sector is heading: whereas the state of the overall economy remains fragile (in the US, as well as in the UK), the sustainable and organic phenomenon looks more promising than ever. Better yet, it seems to have reached a tipping point as big business is taking it to the mass audience.
However, good numbers and growth trends are only part of the story. In fact, we are currently experiencing a shift in the way people approach food. New habits are discovered and there is a newfound passion for all things tasty and fit. But while the broader picture is encouraging indeed, it is unclear how the presence of such food juggernauts will impact the organic/sustainable trend.
First, it remains to be seen how mainstream exposure will affect the way companies do business. For example, while Coke assures that it wants to be "more like Honest Tea", the latter prepares to launch a mass-market line of its bottled teas containing more sweeteners. Particularly to the health-conscious crowd, such news serves as an uncomfortable reminder of the unwholesome diet they reject and suggests a step in the wrong direction for the firm from Bethesda, MD. Being more accessible does usually mean making concessions in terms of products' nutritional and gustatory features, which in turn have ramifications for the companys ethos. And thats a challenge most small companies havent faced before.
Secondly, and maybe most importantly, it appears that the latest trend is becoming more frequently based on labels and certifications than a genuine passion for change or quality improvement. It is understandable that a company like McDonalds can only benefit from offering Rainforest Alliance certified teas, but, given its track record, switching suppliers only on that basis does seem a little hypocritical. After all, what you are offering your customers is, first and foremost, a tea of certain quality and taste. Production standards and company ethics undoubtedly matter, but it would be dangerous to reduce the overall selective criteria to a mere juggle of labels. That is especially true when only fifty percent of PG Tips produce actually comes from sustainable sources. Or, to put it in another way, half doesn't.
The implications for the abovementioned issues are more important than they appear at first glance. The reputation of a whole industry is at stake, because increasing the (mis)use of labels and certificates as keys to peoples hearts and minds (as well as their wallets) diminishes their effect in the long run. The various symbols appear to be en route to becoming somewhat of a commodity - a seal that you can simply acquire and pin to almost anything. It is called "green washing" - and it represents a potential "shot in the foot" for the entire industry, especially in the context of a developing mass-market.
Also, there is a risk of establishing a false distinction between relevant product features. Indeed, one of the main benefits of labels that is rarely mentioned is not only that they certify certain product's characteristics or production methods, but that they simultaneously seem to retrograde the vast majority of "conventional" products that do not comply with them. It fosters a perilous "us vs. them" mentality. In fact, it is important to remember that if a product is not certified organic or sustainable, it doesn't mean it isnt intrinsically either or both. Gourmet tea is a good example. Organic or ethically harvested produce does not necessarily translate into better tasting tea or increased health benefits, whereas "conventional" tea producers may adhere on their own initiative or through other schemes - to the strictest of production standards.
Compliance with standards that are relevant to consumers and producers is not the subject of discussion and big companies can certainly contribute in preaching the message to the masses. However, the issue remains that certain concepts that may not be of primary concern to a particular type of business - might carry a stronger connotation for certain consumers. It is therefore in the interest of the entire industry of specialty products to prevent organic farming or particular business ethics from becoming some sort of get-out-of-jail-free card for products of mediocre quality and taste.
The word dog doesnt bark.
As the Natural Products Expo West opens its doors to an expected record number of participants, healthy and organic goods are to take center stage at the countrys largest trade show, held in Anaheim, California. The event, taking place from March 13 to 16, welcomes a broad field of trade professionals and experts with a focus on the complete value chain of this expanding industry.
While food and beverages (anything from raw ingredients to frozen meals) continue to dominate the stands, the show also features personal care and sustainable living goods, as well as speakers from multiple disciplines, indicating the scope of buzz surrounding publics ever-growing interest in healthy and sustainable produce. And as the R-word resurfaces across the US, the event also highlights the positive prospects for the broader sector. For example, the natural products sales in the US have jumped a healthy 9.7% across all retail channels in 2006.
The trend clearly reflects consumers increased awareness and concern for natural goods and equitable production methods. What was once considered a fad is becoming part of pop culture, because behind the good numbers and the rosy scenarios lies a genuine shift in the way people relate to products and to companies that produce them. Its become a question of lifestyle now.
A case in point is the Expo West. Staying true to Californias involvement with green issues, the event supports various renewable energy projects during the show. Hollywood has always been so mainstream.
Coca-Cola has announced on Tuesday that it reached an agreement to acquire 40% of privately-held tea maker Honest Tea. The deal, worth $40 million, values the company from Bethesda, MD at $100 million and includes an option for the soft drink giant to purchase the remaining stake in the healthy beverage company after three years.
The Atlanta-based company will thereby bolster its portfolio of non-carbonated drinks, which includes Fuze and Gold Peak tea brands, Nestea and Enviga tea drinks and Glacéaus VitaminWater, which it bought last year for $4.1 billion. The latest move is a clear indication of where Coke sees future growth: as traditional soft drink sales declined by six percent in the first nine months of 2007, bottled tea volume was up a healthy 24% in the same period compared to 2006, according to Beverage Digest.
Despite its small size, Honest Tea has recorded a noteworthy growth of 70% in 2007, grossing $23 million in sales. The companys appeal lies in its comprehensive range of teas and other healthy beverages with a low-calorie profile, organic certification and premium brand image. However, an important obstacle for the expansion of the company, in its 10th year of existence, has been a relatively restricted presence in mainstream outlets, limited mostly to natural-food and specialty retailers like Whole Foods Market, Inc. A partnership with Coca-Cola gives Honest Tea exposure to a much wider distribution network in universities, restaurants and grocery stores, where Coke has exclusive relationships.
While the agreement clearly makes strategic sense for both parties, questions remain about its ethical aspect. Will the deal be seen as yet another case of a small company selling out to a giant or will it be viewed as a multinationals new (and healthier) approach to doing business? The increasingly principled consumers, at the core of the hip brand, have three years to make up their minds. So does Coke.
Tea industry veteran Bruce Richardson recently was elected to the Advisory Board of the Specialty Tea Institute (STI), internationally recognized as the voice of the specialty tea industry. The noted author and owner of Elmwood Inn Fine Teas in Perryville, Kentucky will serve a two-year term of office, working with the nine-member Advisory Board to govern and represent the organization. Based in New York City, STI provides educational and networking resources to the specialty tea industry.
US tea authority and author James Norwood Pratt served as an international juror for India's Southern Tea Competition 2005, organized by the United Planters Association of South India (UPASI) and the Tea Board of India. Teas from various south India growing districts including Nilgiris, Wynaad, Anamallais, Travancore, High Ranges, and Karnataka were included in the competition. The goal of the competition is to recognize and encourage excellence by showcasing South India's best quality teas, along with India teas in general.